Financial Director April Wilkinson told the North Ridgeville Finance Committee on July 16 that the city faces a projected general-fund shortfall beginning in 2027 and presented a proposal to raise the municipal income tax rate from 1% to 1.75% to stabilize finances.

Wilkinson said the increase would be expected to generate roughly $6.3 million a year and that under the proposal 85% of the additional revenue would be used for the general fund while 15% would be directed to capital improvements and debt. She told committee members that under the city's current five-year forecast "the excess revenue over expenses becomes negative again in 2027," and that the city could exhaust carryforward balances in later years if revenue and spending trends continue.

The proposal is a response to multiple pressures the presenters described: continued community growth, rising operating costs, deferred capital needs such as waterline and sanitary sewer work, road reconstruction, and the need to maintain the city's current credit rating. "This proposal is to secure our position for the community to provide the essential services of a growing community and to provide what our safety forces need," Wilkinson said. She reminded committee members that Moody's, the rating agency, had highlighted the importance of maintaining a strong operating fund balance and liquidity when assigning the city its double-A1 rating.

Mayor Corcoran and other speakers reviewed capital and infrastructure needs that factor into the budget outlook, including a waterline master plan, sanitary sewer extensions (including a sanitary line from Hampton Place to Center Ridge and removal of the Becker Lift Station), a proposed additional water tower, and long-running road and bridge projects. Corcoran noted recent outside funding the city has obtained for projects as examples of successful grant and partnership work, citing a $700,000 award for a Bainbridge/route roundabout and a $33,000,000 award for the Race Road overpass.

Wilkinson told the committee that the city's target carryforward balance for the general fund is six months of operating expenses and that some other funds have lower targets. She said the Fund Balance at the time of Moody's March rating was about $11,000,000 and that, without additional revenue, the modeled fund balance could be negative by roughly $10,600,000 in later years of the forecast if current trends hold.

On specifics of the tax plan, Wilkinson said committee members would see that the proposal would increase the rate to 1.75% and expand the resident credit for workers who are employed outside the city. She said about 80% of taxpayers live in North Ridgeville but work outside the city; under the proposal many residents who work outside the city would see a net decrease because the credit would increase. "The impact to most residents is that they'll pay less in our proposal and there'll be no impact to our seniors in almost most, in 99 percent of the cases," Wilkinson said.

Committee members asked questions about scale and timing. Wilkinson said the $6.3 million estimate accounts for the credit and that any revenue from an approved increase would take time to flow to the city. She said the administration's plan was to present legislation to the full council at its July 21 meeting and, if council approves, to adopt the ordinance on Aug. 4 to meet the Board of Elections filing deadline on Aug. 6.

Members discussed alternatives and trade-offs, including whether expanding income tax and cancelling some local levies would be revenue-neutral and whether proposed levy eliminations would materially change long-term forecasts. Committee members also raised political and outreach considerations: the city has historically had a low rate (1% is the statutorily allowable without voter approval), attempts to increase the rate have failed in prior years, and the administration said it would run an educational campaign explaining who would pay more, who would pay less, and what the revenues would be used for.

No formal vote was taken at the finance-committee meeting. Wilkinson and the mayor described the next steps as legislative: prepare and introduce the ordinance July 21, consider adoption Aug. 4 to meet the Aug. 6 Board of Elections deadline, and conduct public information and outreach prior to any ballot action.

The presentation and discussion included multiple budget and program details that the administration said would be part of further public materials: the five-year fund forecast, the city's current fund-balance policy (six months target for the general fund), estimated additional property-tax revenue from a recent revaluation (about $578,000 noted), and how supplemental appropriations and one-time versus recurring costs have affected prior-year budgets. The administration emphasized that rising, permanent employee costs differ from one-time capital costs and that sustaining Moody's credit rating lowers borrowing costs for future projects.

The committee adjourned with direction to bring proposed legislation to council on the stated schedule and with the administration committing to an informational campaign should council place the measure on the ballot.